Some Operators Closing Retail Clinics, Scaling Back Expansion Plans

Main Category: Primary Care / General Practice
Also Included In: Public Health;  Pharmacy / Pharmacist
Article Date: 08 May 2008 - 7:00 PDT

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The "boom" of walk-in health clinics at pharmacies, supermarkets and retailers "is showing signs of slowing," the Wall Street Journal reports. As of May 1, there were 963 retail clinics in the U.S., compared with 125 three years ago. However, some retail clinic operators recently have closed 69 clinics in 15 states, and others, including CVS Caremark, have announced their intentions to scale back clinic expansion plans.

Tom Charland, owner of Merchant Medicine and a former vice president for strategy at CVS' MinuteClinic, said, "We have seen fallout in this industry, on a smaller scale, that is not unlike the dot-com bubble," adding, "The big mistake was for people to think they could reach break-even in six months. People are learning this is an 18-to-24-month process to get to break-even."

According to Charland, many of the venture capitalists and private-equity firms who financed clinic operators did not fully understand how complicated and expensive the clinics are to operate, and while patients like the clinics' convenience and quality of care, acceptance of the clinics has been slow.

Clinic operator CheckUps spokesperson William Armstrong said, "You have to have a critical mass of stores seeing a high number of patients to get somewhere," adding that new clinics need to spend a lot of money on marketing to increase awareness and that the clinics become expensive quickly.

"Not everyone is trimming sails," according to the Journal, as Walgreens has plans to more than double the number of its Take Care health clinics this year by adding about 240 locations (Armstrong, Wall Street Journal, 5/7).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

© 2008 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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